Unsurprisingly 2019 novel coronavirus disease (COVID-19) and its impact on construction contracts has been a key concern for our clients recently. Many of those clients use a JCT form of contract, usually with amendments. Continue reading
REUTERS | Corbis
March 17, 2020
COVID-19: time and money under JCT
REUTERS | Maxim Shemetov
March 17, 2020
Court of Appeal upholds TCC on hybrid contract issue
I always enjoy reading Coulson LJ’s judgments as he explains things so clearly. Therefore, you’ll not be surprised to see that this week I’m looking at his judgment in C Spencer Ltd v MW High Tech Projects UK Ltd, where he upheld Farrell J’s October 2019 judgment. To be fair, I like her judgments too (although we’ve not had the benefit of so many of those yet), and I also wrote about that judgment at the time. Continue reading
REUTERS | Carlos Jasso
“Documents create a paper reality we call proof.”
(Mason Cooley, American writer, 1925 – 2002)
Construction and engineering projects, and the disputes that sometimes arise from them, throw up a great deal of paperwork and data. While that is probably true of the majority of joint enterprises that continue over a substantial period, it is ensured in construction and engineering projects by contracts which typically require the creation of long paper-trails of minutes, progress reports, programme updates, cost data, notices, instructions, certificates and determinations throughout the project.
In modern times, we can also add to the above list the less formal means of communication that are now prevalent. Even where a formal project correspondence or collaboration system is used (and is supposed to be used exclusively), people may still send emails on the side (sometimes copying in colleagues, sometimes not; sometimes from their formal work email, sometimes from a personal address but using their employer’s device). We have recently seen increased use of messenger apps such as WhatsApp to transmit what would traditionally have been formal communications between individuals – even attaching documents or other images, sometimes saying things unofficially that could be used against the individual or their company. Continue reading
REUTERS | Hannah McKay
The TCC has just handed down judgment in Yuanda (UK) Company Ltd v Multiplex Construction Europe Ltd and another, which will be of interest to the construction industry as it deals with how ABI-type performance bonds operate.
Background
In July 2014, Yuanda entered into a sub-contract with Multiplex for façade works on a major project at Blackfriars Road. The sub-contract was based on a JCT Design and Build Sub-Contract, 2011 Edition. Yuanda also procured a “Guarantee Bond” in favour of Multiplex in the sum of £4,411,490.70 that had an expiry date of 4 April 2020 – referred to in the judgment as the “Guarantee”.
The main contract works were delayed, as were those under the sub-contract. Yuanda believed it was entitled to an extension of time, a view not endorsed by Multiplex. Multiplex settled certain claims under the main contract, part of which was a payment of £7.5 million of liquidated damages (LDs) to the employer. Multiplex sought to recover this sum from Yuanda. This claim was rejected by Yuanda, who in turn raised a claim of circa £7 million as part of its final account.
Multiplex commenced an adjudication against Yuanda on 2 December 2019, although the parties agreed that the adjudicator would have until 6 March 2020 to make his decision. On 17 January 2020, Multiplex made a call on the Guarantee. Continue reading
REUTERS | David Mdzinarishvili
It is almost 30 months since Jonathan wrote about BEIS’s consultation on the 2011 amendments to the Construction Act 1996. As I’m sure everyone knows, the amendments were introduced by Part 8 of the LDEDC Act 2009. A couple of months later, Jonathan followed up on his initial piece and also wrote about BEIS’s consultation on cash retentions, which was running in parallel.
Fast forward to February 2020 and the government has finally published a summary of the responses to the Construction Act 1996 consultation and the cash retentions consultation. As adjudication doesn’t really feature in the context of cash retentions, I thought I’d focus on the comments in relation to adjudication in the Construction Act 1996 consultation. Continue reading
REUTERS | David Mercado
For many in the construction industry there is a degree of inevitability that a commercial dispute will arise during the delivery of their project. It’s a view that has some substance as the industry is still seen as adversarial and divisive, with complex, protracted and costly disputes being something of the norm.
However, over the years UK construction has been encouraged to take steps to address its adversarial nature and collaborate. Calls for integrated approaches from the likes of Sir Michael Latham, Sir John Egan and Sir Roy McNulty, and more recent collaborative working principles defined through BS 11000 and ISO 44001, are all designed to reduce the propensity and corrosive consequences of disputes.
In parallel, less lofty routes that seek prompt resolution of disputes have developed and the industry has an established maturity and expertise in a range of early intervention and alternative dispute resolution techniques. However, given the unprecedented levels of investment, both private and public sector clients need to shift their focus from remedies and contractual defences to techniques that decrease the likelihood of disputes arising in the first place.
Put simply, the industry needs to better explore tangible techniques for dispute avoidance. Continue reading
REUTERS | Peter Cziborra
February 26, 2020
I tort I was covered? Management companies procuring maintenance works – a common pitfall
Tenants and building owners frequently devolve management of their repair and maintenance responsibilities to management companies, who often enter into agreements with contractors for the repair and maintenance of the buildings they manage.
This can be an attractive prospect from an administrative point of view, keeping such contractual arrangements at arm’s length from an occupier who lacks the resource, expertise or appetite to manage and monitor such relationships.
However, devolving responsibility for entering into maintenance contracts is not without risk if no provision is made for recourse should things go awry as illustrated by the recent first instance case of John Innes Foundation and others v Vertiv Infrastructure Ltd. Continue reading
REUTERS | Mohammad Ponir Hossain
February 21, 2020
Mediation update: will courts soon be ordering parties to mediate?
In 2013, Sir Alan Ward in Wright v Michael Wright suggested that it is perhaps time to review the rule in Halsey v Milton Keynes that to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction on their right of access to the court.
Sir Alan wondered whether some bold judge would perhaps accede to an invitation to rule on the questions he raised about Halsey (including whether what was said was obiter) so that the court could look again at Halsey in the light of (what was in 2013) ten years of developments in this field.
Seven years on, despite much mention of Halsey, no one has taken up Sir Alan’s invitation. However, two recent cases indicate that this may soon happen. Continue reading
REUTERS | Thomas Peter
February 18, 2020
The Terminator’s dilemma
The jurisprudence on the effect of termination on the recoverability of liquidated damages for delay has many things in common with the Terminator film franchise. First, both began ages ago and seem likely to run on and on forever. Second, the instalments in each are of variable quality and sometimes appear to have been produced in ignorance of what came before. Third, each concerns a “Terminator”: an antagonistic figure resolved to bring things to an abrupt end, whether that be via (i) terminating a contract or (ii) the remorseless annihilation of all human life. Continue reading
REUTERS | Toby Melville
February 18, 2020
Can parties to adjudication in Scotland raise any legitimate defence to a money claim?
At the moment, we seem to have more Scottish than English adjudication enforcement judgments to talk about. I’m not entirely sure why that is, although I’ve heard the TCC is re-directing some adjudication enforcements to the County Court in the Central London Centre. That may be better for the parties if they get an earlier hearing date, but it means fewer published judgments, which isn’t so great for those of us who regularly blog about these things!
So, I turn to Lord Clark’s judgment in Field Systems Designs Ltd v MW High Tech Projects UK Ltd, where the issues were whether the adjudicator had failed to exhaust his jurisdiction and/or give adequate reasons and, if he had, was it a material breach of the rules of natural justice. You may recall these issues also popped up in another Scottish judgment (Babcock Marine (Clyde) Ltd v HS Barrier Coatings Ltd), which Matt looked at earlier this year.